Two Departments, Journal Entries with Supporting CalculationsWeighted Average

Method (Note: This problem includes two departments. The second department may be beyond the

scope of most classes. Instructors may choose to assign only the requirements related to Department 1.)

Patterson Laboratories, Inc., produces one of its products in two successive departments. All mate-

rials are added at the beginning of the process in Department 1; no materials are used in Department 2.

Conversion costs are incurred evenly in both departments. Patterson uses the weighted average method

for process costing. January 1, 2019, inventory account balances are as follows:

Materials inventory ............................................................ $30,000

Work-in-processDepartment 1 (3,000 units, 30% complete)

Direct materials............................................................. 4,560

Conversion costs ........................................................... 10,640

Work-in-processDepartment 2 (3,550 units, 40% complete) .......................... 43,439

Finished goods inventory (2,000 units @ $16)....................................... 32,000

During January, the following transactions occurred:

1. Purchased materials on account, $90,000.

2. Placed $84,000 of materials into process in Department 1. This $84,000 represents 24,000 units

of materials.

3. Distributed total payroll costs: $108,116 of direct labor to Department 1, $62,700 of direct labor

to Department 2, and $51,000 of indirect labor to Manufacturing Overhead.

4. Incurred other actual manufacturing overhead costs, $81,000. (Credit Other Accounts.)

5. Applied overhead to the two processing departments: $88,000 to Department 1 and $43,900 to

Department 2.

6. Transferred 25,000 completed units from Department 1 to Department 2. The 2,000 units remaining

in Department 1 were 20% completed with respect to conversion costs.

7. Transferred 26,000 completed units from Department 2 to finished goods inventory. The 2,550

units remaining in Department 2 were 70% completed with respect to conversion costs.

8. Sold 20,000 units on account at $27 per unit. Patterson uses weighted average inventory costing

procedures for the finished goods inventory.

Required

a. Record the January transactions in general journal form for Department 1 and Department 2.

b. Prepare a product cost report (with its supporting calculations) for Department 1.

c. Prepare a product cost report (with its supporting calculations) for Department 2.

d. Determine the balances remaining in the Materials Inventory account, in each work-in-process

account, and in the Finished Goods Inventory account.